Wells Fargo Expands Fake Bank Accounts Class Action Settlement To $142M

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Wells Fargo has expanded a class action settlement that would resolve allegations that the bank opened millions of fake accounts, bringing the total up to $142 million.

In March, Wells Fargo initially agreed to settle claims that the bank fraudulently opened more than 2 million credit and debit card accounts without telling customers, but last Friday they expanded the proposed agreement to extend the Class period to May of 2002.

The expansion will bring the $110 million settlement from March up to $142 million.

“The expansion of this agreement is another important step to make things right for our customers,” said the president of Wells Fargo. “On our journey to rebuild trust, we want to ensure our customers feel confident that we have heard their concerns about retail sales practices, which includes offering them numerous opportunities for remediation.”

Regulators broke the news that Wells Fargo employees had been told to “do whatever it takes” to meet steep quota requirements for opening new accounts. According to the class actions filed over the scandal, desperate employees resorted to opening fake accounts without their customers’ knowledge or permission.

Wells Fargo also faces $185 million in civil penalties to the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Los Angeles City Attorney’s Office over the allegations, as well as continued investigation.

Twelve class actions were filed over the scandal and were eventually consolidated. In addition, the former chair and CEO of the bank, former head of the bank, several board members and about 5,300 employees were fired. The upper executives were also forced to turn over many millions in compensation.

“This proposed $142 million non-reversionary Class Action Settlement now aims to bring full relief to Wells Fargo’s customers,” says the settlement proposal. “It expands the class of customers covered by the Government Settlements by nine years, well past the statute of limitations period that may be applicable to many claims. It reimburses wrongly paid fees. It provides relief for damaged credit. And, after providing this compensatory relief, the Settlement fairly allots the remaining funds to the Class.”

According to the expanded settlement agreement filed in federal court, the settlement Class now includes “all Persons for whom Wells Fargo or Wells Fargo’s current or former subsidiaries, affiliates, principals, officers, directors, or employees opened an account in their name without consent, enrolled them in a product or service without consent, or submitted an application for a product or service in their name without consent during the period from May 1, 2002 to April 20, 2017.”

The settlement agreement indicates that Wells Fargo will conduct a “comprehensive, multimedia program of notice to the Class.” Additionally, Wells Fargo has contracted with PricewaterhouseCoopers to conduct an independent audit to identify fake accounts.

The plaintiffs are represented by attorneys Derek W. Loeser, Gretchen Freeman Cappio, Daniel P. Mensher and Matthew J. Preusch of Keller Rohrback LLP.

The Wells Fargo Fake Bank Accounts Class Action Lawsuit is Jabbari v. Wells Fargo & Company, et al., Case No. 3:15-cv-02159, in the U.S. District Court for the Northern District of California.

UPDATE: On May 24, 2017, a federal judge says he will grant preliminary approval to the terms of a Wells Fargo class action settlement, conditional on certain changes. According to the judge, the new agreement should provide more time for settlement administration. Claimants should have more time to file claims, and the court should have more time to evaluate the work of the settlement administrator and its credit injury experts.

UPDATE 2: On July 8, 2017, the $142 million Wells Fargo class action settlement was preliminarily approved by a California federal judge. 

UPDATE 3: September 2017, the Wells Fargo unauthorized bank accounts class action settlement’s website has been established. Click here to learn more about what the settlement provides to Class Members. 

UPDATE 4: On May 30, 2018, a California federal judge granted final approval for a $142 million class action settlement over claims that Wells Fargo opened fake bank accounts, despite many arguments that the settlement is insufficient.